Rwanda’s government has emulated other countries in the continent of Africa to impose a tax on online services that are been consumed in the country.
This decision by the Rwandan government came months after Zimbabwe and Nigeria had decided to collect taxes from e-commerce and digital companies from online services rendered in the country such as; Netflix, Google, Amazon, etc.
The Rwandan Revenue Authority (RRA) revealed that the proposal has been tendered before the Ministry of Finance and Economic Planning from where it will pass through several processes before it will be fully implemented.
The revenue Authority for the Rwandans Deputy Commission General, Mr Jean – Louis Kaliningondo says: “When you pay for services such as Netflix, you are using money that you have generated in Rwanda. So, we are asking, why don’t we collect vat on these services yet they are being paid for by our citizens? If you pay 12 dollars a month for Netflix, why don’t we keep some of that amount at the source here?”
Several countries in Africa have expanded the peril of their indirect taxes to cover online service; however, just a few have duly implemented some form of direct digital services tax.
The deputy commission for RRA in an addendum noted that one of the key variables about VAT is that, the money is been paid to the country where the service is been consumed.
“If you go to western countries, for example, France, you find that Amazon pays VAT yet it is not a French company. European countries are collecting VAT on services provided by foreign platforms”
